
WINTER 2015 FM 420: International Marketing
Arisa Nishio
SACAI Global Expansion
History of Sacai: Chitose Abe is the founder and creative director of Sacai, and started her label in 1988. She owns 100 percent of her business, which allows her complete creative control and freedom to select any commercial considerations she chooses. In the second season of overseas, Sacai had won over 15 clients outside of Japan, including Biffi in Milan, Colette in Paris and Joyce in Hong Kong, including a dozen in the US – and two years later it had quadrupled to 60. Today, the label has over 90 international buyers. Abe has also been able to expand horizontally into other product lines through her more streamlined Sacai Luck and Sacai Men’s lines. Additionally, they are collaborated with few companies as limited products. Origin: Founded in Japan, in 1988 Current international presence: Contracted with approximately 90 buyers Concept of Brand: While her collections may appear to be about femininity, Abe’s interest is in creating clothes that are entirely unique and timeless, innovative and experimental. Juxtapositions of contrasting textures of fabrics such as knits with super fine woven and usage of techniques based on reinterpretations of patterns of the garment transform the pieces into unexpected shapes and silhouettes. To Abe, who is influenced by observing her surroundings and functions of daily life, the Sacai collection has a distinctive elegance that is based on renderings and transformations of basic and classical items. The result is a collection of items that can transition easily between various occasions and not only reserved for special opportunities. Product Line: Both men’s and Women’s wear (Men’s collection started in June, 2008) She expand her line, Sacai Gem (March, 2006) and Sacai Luck (September, 2006). Price Point: Women: Outer - $900, Tops - $300 -, Dresses - $500, Bottoms - $600 Men: Outer - $ 850, Tops - $300, Bottoms - $500
Packaging:
Shops/Online shops: Barney’s New York, NET-A-PORTER, STYLIGHT, SHOPSTYLE, POLYVORE, Farfetch Barney’s New York owns Sacai in the store in the U.S. Target Marketing in the U.S. Target customers are both men and women. The price point is high-end and luxury. The target customers who are passionate in fashion, still they want to wear more comfortable and wearable daily clothing. Since Barney’s New York owns Sacai, Barney’s New York is regarded as basic fundamental of Sacai’s branch in the U.S. market. Sacai produced limited T-shirt selling only at Barney’s New York. Barney’s New York Marketing Strategy in the U.S.
In 2015, Barney’s New York promotes campaign titled “Better Than Ever”, they target mature and wealthy women.
Barney’s New York is focusing on digital social contents more to interact with consumers. They created the social pages for social media and blogs to engage with their consumers. The main point of social contents is to create and deliver information of seasonal, holiday and recent events of products.
Blog page of Barney’s New York
Barney’s New York also renewed the online website that customers are able to enjoy online shopping. They lead the digital promotion in 2012, and their website personalize to the customers and offer social components of the site including Favorites, My List, Most Loved, Exclusively Ours and The Window. They also created the mobile contents since the mobile has becoming popular and significant, and they are able to offer same contents as online website to the customers.
Online website for Barney’s New York
New Market: Jardins distric, S達o Paulo, Brazil:
Population: 203,657,210 (as of 2015) Languages: Portuguese (official), Spanish, English, French Currency: Real
Government: Federal republic Economic summary: GDP/PPP (2011 est.): $2.282 trillion; per capita $11,600 Largest cities: S達o Paulo, 19,900,000; Rio de Janeiro, 11,836,000; Salvador, 2,590,400; Belo Horizonte, 5,736,000; Recife, 1,485,500; Porto Alegre, 4,034,000
Local Competitors and Local Retailers The local competitors are global luxury brands and retailers and local high-end boutiques. Popular global luxury brands and retailers in São Paulo
Kate Spade
Marc Jacobs
Coach
Jimmy Choo
Giorgio Armani
Tory Burch
Osklen
Carolina Herrera
Targeting Luxury Items in Brazil – Fashion and Accessories
Source: http://www.euromonitor.com It is the small percentages of luxury market in Brazil in this graph, still luxury market is growing currently. The Brazilian luxury market displays signs of growth even amidst the challenging and unfavorable economic scenario. In 2013, this market was worth a total of USD 3 billion, increasing 11% from the
previous year, an increase that can be linked to the rise of the upper classes in the country. The fashion segment is representative for luxury product consumers in Brazil, with brands like Lacoste, Calvin Klein, Forum and Osklen receiving the most interest. These brands have not only established official e-commerce stores to serve the Brazilian public but are also found on large online stores in this sector like Dafiti and Farfetch. Some of these products gather the interest of their online audience through the influence of social media, in which celebrities and friends can be found wearing a brands’ most recent collections. Store-based retailing remains the most important distribution channel for luxury goods. Luxury nongrocery retailers dominate thanks to offering wide ranges in the largest categories such as designer apparel and footwear, luxury accessories and luxury jewelry and timepieces. Internet retailing meanwhile gained share during the review period, while continuing to account for a low share in 2014. This channel is likely to offer a strong potential for sales growth for the leading players in the forecast period. Key points and summary of luxury market
Ongoing growth despite constraints
Affordable luxury brands gain share in 2014
Despite fragmented shares, luxury houses are improving share
Store-based retailing continues to dominate sales of luxury goods
Moderate growth expected in forecast period
Distribution Methods/Channels in Brazil: To understand and justify the basic information of distribution channels and methods in Brazil is the import taxes to Brazil, Non-refundable sales taxes, and Industry average commission or mark-up for distribution in Brazil. As we are direct exporters from Brazil, we need to understand the business trend in Brazil and negotiate with importers. In Brazil, brokerage services are divided into two types of organizations; trading companies and commercial importers. For small-scale enterprises, introducing their products through brokers is given the extensive knowledge brokerage firms have of the domestic market and their close ties with potential buyers. Both of these advantages serve to facilitate product advertising in target markets. As a consequence, market research and transaction costs are reduced, as brokers handle the related business and customs procedures to ensure the entry of the imported goods into Brazil. Brazil law mandates that trading companies obtain special licenses and that they be constituted as publicly traded companies with a minimum capital requirement as established by the National
Monetary Council (Conselho Monetário Nacional). Commercial importers are prevalent in Brazil, as they are governed by less stringent rules of incorporation. These firms have a greater tendency to work with small import volumes and operate, by and large, at the regional level. The important to know is that on the event of substantial import volumes, execution of an exclusive import agreement may be advisable, through which the trading company or commercial importer acts as the sole supplier of the foreign good in Brazil. Exporters are urged to take into account the company’s commercial and financial capacity prior to concluding the exclusivity agreement. Commercial Representatives Exporters may opt to secure independent professional services or companies to act as their commercial representatives in Brazil, compensating Retail Market in Brazil: As multinational apparel retailers contemplate entering Brazil’s mass market, they must come to grips with a consumer landscape that differs considerably from what they find in most developed and many emerging markets. Furthermore, Brazil’s mass-market apparel shoppers seem particularly conscious of fashion; only in Brazil did it rank among the top three attributes at preferred stores. Fashion trends there are strongly shaped by local celebrities (in particular, prominent characters from popular television soap operas), and only local retailers (with a few noteworthy exceptions) consistently offer the mass-market segment these fashions. Also, E-commerce in Brazil has been growing at over 30% per year since 2000, reaching close to US$ 5 billion in 2009 – even if broadband, at just slightly less than six percent, is not yet a reality for most people. Brazil also has one of the most well developed online banking systems in the world. Advertising Strategy: Sacai’s advertising strategy always try to capture the customers’ eyes which creates unique, sophisticated and simple attracted ad. They always show what is “Sacai” and the essence and spirit of Sacai. Also, we have fashion show in each season, so that fashion media focus on our brands and upload runway pictures in social media as well as our website. They need to promote as Japanese high-end brand.
S/S 2015 Advertising
Showcase Campaign Pricing Issue: The average income of Brazil is low, and Brazil’s official minimum wage in 2010 was $288 per month. Since we are going to expand the luxury fashion items to Brazil, the pricing of Sacai’s clothing is very pricy and luxury. It might be hard to focus on only Brazilian people as all Brazilian people are not able to afford it, we are focusing on rich people and tourists as well. Localization Issue: Since the global luxury brands have been expanding around Jardins distric, it becomes more competitive area for our brand. But since this area has become more luxury and tourism area, so it is the great area to have our branch in this area. However, at the same time, the land price has been more expensive, so it is challenging to have large space for our branch. Marketing strategy
Since our brand is originally from Japan, so we want to highlight as “Japanese high-end brand�. Also, our producers and manufacturers are Japanese, so it makes high-quality of clothing. Executive Summary: Since Sacai started in Japan, they have expanded their branches and partnered with more than 90 companies. As I consider that next new foreign market for Sacai is Brazil where has great opportunity to help and support luxury brand to grow successfully. And Brazilian luxury market has been growing in these years. Additionally, Japanese based on luxury brands have not expand more in Brazil compared to other foreign luxury brands.
Source: "Barneys New York Is 2012 Luxury Retailer of the Year." Luxury Daily RSS. 28 Dec. 2012. Web. 10 Feb. 2015. <http://www.luxurydaily.com/barneys-new-york-is-2012-luxury-retailer-of-theyear/>. "Barneysâ&#x20AC;&#x2122; Top Priority Is Digital Marketing, Social Media." Luxury Daily RSS. 30 June 2011. Web. 10 Feb. 2015. <http://www.luxurydaily.com/barneys-top-priority-is-digital-marketing-socialmedia/>. "Brazil." : Maps, History, Geography, Government, Culture, Facts, Guide & Travel/Holidays/Cities. Web. 10 Feb. 2015. <http://www.factmonster.com/country/brazil.htm>. "Brazil Population (LIVE)." Population of Brazil (2015). Web. 10 Feb. 2015. <http://www.worldometers.info/world-population/brazil-population/>. "Chitose Abe | BoF 500 | The Business of Fashion." Chitose Abe | BoF 500 | The Business of Fashion. Web. 3 Feb. 2015. <http://www.businessoffashion.com/chitose-abe . "Chitose Abe of Sacai Says It's About Following Your Instincts - The Business of Fashion." The Business of Fashion. 28 May 2013. Web. 3 Feb. 2015. <http://www.businessoffashion.com/2013/05/chitose-abe-of-sacai-says-its-all-about-followingyour-personal-instincts.html>. "Establish a Distribution Channel in Brazil in Less than 45 Days." The Brazil Business. Web.
17
Feb.
2015. <http://thebrazilbusiness.com/article/establish-a-brazilian-distribution-
channel-in-45-days>. "How Half the World Shops: Apparel in Brazil, China, and India." How Half the World Shops: Apparel in Brazil, China, and India. Web. 18 Mar. 2015. <http://www.mckinsey.com/insights/consumer_and_retail/how_half_the_world_shops _apparel_in_brazil_china_and_india>. "How
to
Export
to
Brazil."
Brasilglobalnet.
Web.
18
Feb.
2015.
<http://www.brasilglobalnet.gov.br/ARQUIVOS/P>. "In Booming Brazil, Census Shows Income Gap Persists." Worldcrunch.com. Web. 24 Feb. 2015. <http://www.worldcrunch.com/business-finance/in-booming-brazil-census-shows-incomegap-persists/c2s4115/#.VO40_vmG_EM>. "Sacai." Sacai. Web. 3 Feb. 2015. <http://www.sacai.jp/profile/>. Saorin, Kay. "Barneys Uses Famous Supermodels to Target Mature Consumers." Luxury Daily RSS. 6 Feb. 2015. Web. 10 Feb. 2015. <http://www.luxurydaily.com/barneys/>. "Luxury Goods in Brazil." Luxury Goods in Brazil. Web. 25 Mar. 2015. < http://www.euromonitor.com/luxury-goods-in-brazil/report >. "Six Trends That Will Shape Brazil's Consumer and Retail Market." - Global Intelligence
Alliance. Web. 18 Mar. 2015. <http://www.globalintelligence.com/insights/all/six-trends-that-will-shape-brazil-sconsumer-and-retail-market>. Teixeira, Marcelo. "Targeting Luxury Items Consumers in Brazil." Tech in Brazil. Web. 25 Mar. 2015. < http://techinbrazil.com/targeting-luxury-items-consumers-in-brazil>.